“ACCOUNTING CYCLE WORKBOOK”

(ANALYZING TRANSACTIONS TO
POST-CLOSING TRIAL BALANCE)

Owned by:
ERIC CHARLES T. MONTOYA
12-ABM GRADUATE
NCIII-BOOKKEEPING HOLDER

No to personal distribution. The owner shall be the one to distribute this workbook to whom
he wishes to. It’s a copyrighted material. Any form of distribution without the approval of the owner
is illegal.
PROBLEM 1
On January 1 of the current year, Montoya L. Padilla opened the “Montoya’s Sewing
Services,” and during the month, the following transaction were completed:
 Jan. 1- Montoya L. Padilla invested PHP. 800,000 worth of cash in the business.
 Jan. 1- He bought two sewing machines worth PHP. 30,000 each from Montongaya
Merchandising, with a down payment of PHP. 15 000, the balance is payable within 60
days.
 Jan. 1- Paid a five-month rental of the shop, PHP. 30,000.
 Jan. 1- Paid a one-year insurance policy, PHP. 5,700
 Jan. 3- Bought sewing tools and sewing supplies for PHP. 5,900 and PHP. 2, 700
respectively from Oz’s Trading on account.
 Jan. 5- Montoya’s Sewing Services rendered service to Jazer’s Family, PHP. 1, 200
received.
 Jan 7- Billed Qynee Montovoro for the rendered service amounting to PHP. 5, 000.
 Jan. 10- Purchased office supplies worth PHP. 15,000. At the same day received PHP.
1, 250 from various customers
 Jan. 13- Received PHP. 12,500 from various customers.
 Jan. 14- Lend PHP. 15,000 to Balungaya’s Merchandising
 Jan. 15- Paid the wages of the shop helper amounting to PHP. 2,500
 Jan. 17- Montoya L. Padilla withdrew PHP. 5,000 from the business for personal use.
 Jan. 18- Received PHP. 2,000 for the transaction made on Jan. 7
 Jan. 20- Received PHP. 14 750 from various customers.
 Jan. 20- Bought a delivery motor worth PHP. 50,000 on account from YongYong
Merchandising.
 Jan. 21- Hired a delivery boy, with a contract of PHP. 200 per delivery.
 Jan. 22- Billed Mrs. Queen Camilla worth PHP. 5,000 for the rendered service.
 Jan. 23- Paid 50% for the transaction made on Jan. 20
 Jan. 24- Paid the 20% of the remaining balance to YongYong Merchandising.
 Jan. 25- Paid the remaining balance to YongYong Merchandising.
 Jan. 26- Paid the following monthly expense: utility bills, PHP. 1, 500, miscellaneous, PHP.
2, 500.
At the end of the month, the following data are gathered:
a. The sewing machine are estimated to have 5-year useful life.
b. The actual count of sewing supplies revealed a balance of PHP. 1,750
c. The actual count of office supplies revealed a balance of PHP. 5, 000
d. The business is conservative to estimate a 5% of the receivables to be uncollectible

Requirement.
 Accounting Cycle
 MONTOYA’S SEWING SERVICES
CHART OF ACCOUNTS

ASSET
111 Cash
112 Accounts Receivable
112a Allowance for Bad Debts
113 Sewing Supplies
114 Office Supplies
115 Prepaid Rent
116 Prepaid Insurance
117 Sewing Tools
118 Equipment- Sewing Machine
118a Accumulated Depreciation
119 Delivery Motor Vehicle

LIABILITY
211 Accounts Payable
212 Accrued Interest Expense

OWNER’S EQUITY
311 M.L. Padilla, Capital
312 M.L. Padilla, Drawing
313 Income and Expense Summary

INCOME
411 Service Income

EXPENSES
511 Wages Expense
512 Utility Expense
513 Miscellaneous Expense
JOURNAL ENTRIES

General Journal
DATE EXPLANATION F DEBIT CREDIT
2019
Jan 1 Cash 111 PHP. 800 000
M.L. Padilla, Capital 311 PHP. 800 000
“To record the initial investment”

Equipment- Sewing Machine 118 60 000

Cash 111 15 000
Accounts Payable 211 45 000
“To record the buying of sewing
machine and the balance is payable”

Prepaid Rent 115 30 000

Cash 111 30 000
“To record the paying of five-month
rental of the shop”

Prepaid Insurance 116 5 700

Cash 111 5 700
“To record the paying of insurance
policy”

3 Sewing Tools 117 5 900

Sewing Supplies 113 2 700
Accounts Payable 211 8 600
“To record the buying of sewing tools
& sewing supplies on account”

5 Cash 111 1 200

Service Revenue 411 1 200
“To record the cash received from
service revenue”

7 Accounts Receivable 112 5 000

Service Revenue 411 5 000
 “To record the debt of Q. Montovoro
from the rendered service”

10 Office Supplies 114 15 000

Cash 111 1 250
Cash 111 15 000
Service Revenue 411 1 250
“To record the buying of office
supplies and cash received from
rendered services”

13 Cash 111 12 500

Service Revenue 411 12 500
“To record the cash received from
rendered services”

14 Accounts Receivable 112 15 000

Cash 111 15 000
“To record the debt of Balungaya’s
Merchandising”

15 Wages Expense 511 2 500

Cash 111 2 500
“To record the paying of wages of the
shop helper”

17 M.L. Padilla, Drawing 312 5 000

Cash 111 5 000
“To record the cash get by M.L
Padilla for personal use”

18 Cash 111 2 000

Accounts Receivable 112 2 000
“To record partial payment 0f Q.
Montovoro”

20 Cash 111 14 750

Service Revenue 411 14 750
“To record the cash received from
service revenue”
 Delivery Motor Vehicle 119 50 000
Accounts Payable 211 50 000
“To record the buying of Delivery
Motor”

21 No Transaction

22 Accounts Receivable 112 5 000

Service Revenue 411 5 000
“To record the debt of Queen
Camilla”

23 Accounts Payable 211 25 000

Cash 111 25 000
“To record the partial payment from
buying a Delivery Motor last Jan. 20”

24 Accounts Payable 211 5 000

Cash 111 5 000
“To record the partial payment from
buying a Delivery Motor last Jan. 20”

25 Accounts Payable 211 20 000

Cash 111 20 000
“To record the payment of the
remaining balance in YongYong
Merchandising”

26 Utility Expense 512 1 500

Miscellaneous Expense 513 2 500
Cash 111 4 000
“To record the paying of utility bills
and miscellaneous bills”
POSTING
CASH
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 1 “To record the 111 P 800 000 Jan 1 “To record the 111 P 15 000
initial investment” buying of sewing
5 “To record the 1 200 machine and the
cash received from balance is
service revenue” payable”
10 “To record the 1 250 1 “To record the 30 000
buying of office paying of five-
supplies and cash month rental of
received from the shop”
rendered services” 1 “To record the 5 700
13 “To record the 12 500 paying of
cash received from insurance policy”
rendered services” 10 “To record the 15 000
18 “To record partial 2 000 buying of office
payment 0f Q. supplies and
Montovoro” cash received
20 “To record the 14 750 from rendered
cash received from services”
service revenue” 14 “To record the 15 000
debt of
Balungaya’s
Merchandising”
15 “To record the 2 500
paying of wages
of the shop
helper
17 “To record the 5 000
cash get by M.L
Padilla for
personal use”
23 “To record the 25 000
partial payment
from buying a
Delivery Motor
last Jan. 20”
 “To record the
24 partial payment 5 000
from buying a
Delivery Motor
last Jan. 20”
“To record the
25 payment of the 20 000
remaining
balance in
YongYong
Merchandising”
“To record the
26 paying of utility 4 000
bills and
miscellaneous
bills”

Total 831 700 Total P 142 200

Balance P 689 500

ACCOUNTS RECEIVABLE
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 7 “To record the debt 112 P 5 000 Jan18 “To record partial 112 2 000
of Q. Montovoro payment 0f Q.
from the rendered Montovoro”
service”
14 “To record the debt 15 000
of Balungaya’s
Merchandising”
22 “To record the debt 5 000
of Queen Camilla”

Total 25 000 Total 2 000

Balance P 23 000
 SEWING SUPPLIES
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Jan 3 “To record the 113 P 2 700
buying of sewing
tools & sewing
supplies on
account”

Total 2 700
Balance P 2 700

OFFICE SUPPLIES
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Jan 10 “To record the 114 P 15 000
buying of office
supplies and cash
received from
rendered
services”

Total 15 000
Balance P 15 000

PREPAID RENT
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Jan 1 “To record the 115 P 30 000
paying of five-
month rental of
the shop”

Total 30 000
Balance P 30 000
 PREPAID INSURANCE
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Jan 1 “To record the 116 P 5 700
paying of
insurance policy”

Total 5 700
Balance P 5 700

SEWING TOOLS
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Jan 3 “To record the 117 P 5 900
buying of sewing
tools & sewing
supplies on
account”

Total 5 900
Balance P 5 900

EQUIPMENT- SEWING MACHINE

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Jan 1 “To record the 118 60 000
buying of sewing
machine and the
balance is
payable

Total 60 000
Balance P 60 000
 DELIVERY MOTOR VEHICLE
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Jan 20 “To record the 119 P 50 000
buying of Delivery
Motor”

Total 50 000
Balance P 50 000

ACCOUNTS PAYABLE
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 23 “To record the 211 25 000 Jan 1 “To record the 211 P 45 000
partial payment buying of sewing
from buying a machine and the
Delivery Motor balance is
last Jan. 20” payable”
24 “To record the 5 000 3 “To record the 8 600
partial payment buying of sewing
from buying a tools & sewing
Delivery Motor supplies on
last Jan. 20 account”
25 “To record the 20 000 20 “To record the 50 000
payment of the buying of
remaining Delivery Motor”
balance in
YongYong
Merchandising”

Total 50 000 Total 103 600

Balance P 53 600

M.L. PADILLA, CAPITAL

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 1 “To record the 311 P 800 000
initial investment”
Total 800 000
Balance P 800 000
 M.L. PADILLA, DRAWING
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 17 “To record the 312 P 5 000
cash get by M.L
Padilla for
personal use”

Total 5 000
Balance P 5 000

SERVICE INCOME
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 5 “To record the 411 P 1 200
cash received
from service
revenue”
7 “To record the 5 000
debt of Q.
Montovoro from
the rendered
service”
10 “To record the 1 250
buying of office
supplies and
cash received
from rendered
services”
13 “To record the 12 500
cash received
from rendered
services”
20 “To record the 14 750
cash received
from service
revenue”
 22 “To record the 5 000
debt of Queen
Camilla”

Total 39 700
Balance P 39 700

WAGES EXPENSE
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 15 “To record the 511 2 500
paying of wages
of the shop
helper”

Total 2 500
Balance P 2 500

UTILITY EXPENSE
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 26 “To record the 512 P 1 500
paying of utility
bills and
miscellaneous
bills”

Total 1 500
Balance P 1 500

MISCELLANEOUS EXPENSE
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 26 “To record the 513 P 2 500
paying of utility
bills and
miscellaneous
bills”
Total 2 500
Balance P 2 500
UNADJUSTED TRIAL BALANCE

MONTOYA’S SEWING SERVICES

UNADJUSTED TRIAL BALANCE
JANUARY 31, 2019

DEBIT CREDIT
Cash P 689 500
Accounts Receivable 23 000
Sewing Supplies 2 700
Office Supplies 15 000
Prepaid Rent 30 000
Prepaid Insurance 5 700
Sewing Tools 5 900
Equipment- Sewing Machine 60 000
Delivery Motor Vehicle 50 000
Accounts Payable P 53 600
M.L. Padilla, Capital 800 000
M.L. Padilla, Drawing 5 000
Service Income 39 700
Wages Expense 2 500
Utility Expense 1 500
Miscellaneous Expense 2 500 .
P 893 300 P 893 300
ADJUSTING ENTRIES

DEBIT CREDIT

a. Depreciation Expense P 1 000

Accumulated Depreciation-Sewing Machine P 1 000

b. Sewing Supplies Expense 950

Sewing Supplies 950

c. Supplies Expense 10 000

Office Supplies 10 000

d. Bad Debts Expense 1 150

Allowance for Bad Debts 1 150

e. Rent Expense 6 000

Prepaid Rent 6 000

f. Insurance Expense 475

Prepaid Insurance 475
ADJUSTED TRIAL BALANCE

MONTOYA’S SEWING SERVICES

ADJUSTED TRIAL BALANCE
JANUARY 31, 2019

DEBIT CREDIT
Cash P 689 500
Accounts Receivable 23 000
Allowance for Bad Debts P 1 150
Sewing Supplies 1 750
Office Supplies 5 000
Prepaid Rent 24 000
Prepaid Insurance 5 225
Sewing Tools 5 900
Equipment- Sewing Machine 60 000
Accumulated Depreciation 1 000
Delivery Motor Vehicle 50 000
Accounts Payable 53 600
M.L. Padilla, Capital 800 000
M.L. Padilla, Drawing 5 000
Service Revenue 39 700
Wages Expense 2 500
Utility Expense 1 500
Miscellaneous Expense 2 500
Depreciation Expense 1 000
Sewing Supplies Expense 950
Supplies Expense 10 000
Bad Debts Expense 1 150
Rent Expense 6 000
Insurance Expense 475 .
P 895 450 P 895 450
 MONTOYA’S SEWING SERVICES
STATEMENT OF INCOME
For the Month-Ended JANUARY 31, 2019

Revenues
Service Revenue P 39 700
Expenses
Wages Expense P 2 500
Utility Expense 1 500
Miscellaneous Expense 2 500
Depreciation Expense 1 000
Sewing Supplies Expense 950
Supplies Expense 10 000
Bad Debts Expense 1 150
Rent Expense 6 000
Insurance Expense 475 (26 075)
Net income P 13 625
 MONTOYA’S SEWING SERVICES
STATEMENT OF CHANGES IN EQUITY
For the Month-Ended JANUARY 31, 2019

M.L. Padilla, Capital P 800 000

Total Capital 800 000
Withdrawal (5 000)
Net Capital 795 000
Net Income 13 625
Ending Capital P 808 625
 MONTOYA’S SEWING SERVICES
STATEMENT OF CASH FLOW
For the Month-Ended JANUARY 31, 2019

Cash Flow from Operating Activities

Cash receipts from rendering of services P 31 700
Cash payments to acquire short-term asset (15 000)
Cash payments to employees (2 500)
Cash payment to operating expenses (4 000)
Cash payments to acquire rent (30 000)
Cash payment s to acquire insurance (5 700)
Net cash flow from operating activities P (25 500)
Cash Flow from Investing Activities
Cash payments to acquire property, plant, and equipment P (65 000)
Cash outflow to accounts payable (15 000)
Net cash flow from investing activities P (80 000)
Cash Flow from Financing Activities
Proceeds from cash investment of owner P 800 000
Cash withdrawal of the owner (5 000)
Net cash flow from financing activities P 785 000

Net increase in cash P 689 500

Cash at the end of the Period P 689 500
 MONTOYA’S SEWING SERVICES
STATEMENT OF FINANCIAL POSITION
As of the Month-Ended JANUARY 31, 2019

Current Asset
Cash P 689 500
Accounts Receivable 23 000
Allowance for Bad Debts (1 150)
Sewing Supplies 1 750
Office Supplies 5 000
Prepaid Rent 24 000
Prepaid Insurance 5 225
Total Current Asset P 747 325
Non-Current Asset
Sewing Tools P 5 900
Equipment- Sewing Machine 60 000
Accumulated Depreciation (1 000)
Delivery Motor Vehicle 50 000
Total Non-Current Asset P 114 900
Total Asset P 862 225
Current Liability
Accounts Payable P 53 600
Total Liability P 53 600
Equity
M.L. Padilla, Capital P 808 625
Total Liabilities + Equity P 862 225
CLOSING ENTRIES

DEBIT CREDIT

Income Summary P 26 075

Wages Expense P 2 500
Utility Expense 1 500
Miscellaneous Expense 2 500
Depreciation Expense 1 000
Sewing Supplies Expense 950
Supplies Expense 10 000
Bad Debts Expense 1 150
Rent Expense 6 000
Insurance Expense 475

Service Revenue 39 700

Income Summary 39 700

Income Summary 13 625

M.L. Padilla, Capital 13 625

M.L. Padilla, Capital 5 000

M.L. Padilla, Drawing 5 000
 MONTOYA’S SEWING SERVICES
POST-CLOSING TRIAL BALANCE
JANUARY 31, 2019

DEBIT CREDIT
Cash P 689 500
Accounts Receivable 23 000
Allowance for Bad Debts P 1 150
Sewing Supplies 1 750
Office Supplies 5 000
Prepaid Rent 24 000
Prepaid Insurance 5 225
Sewing Tools 5 900
Equipment- Sewing Machine 60 000
Accumulated Depreciation 1 000
Delivery Motor Vehicle 50 000
Accounts Payable 53 600
M.L. Padilla, Capital 808 625
P 864 375 P 864 375
PROBLEM 2
On December 1 of the current year, Remeses Balungaya opened the “Balungaya’s Multi-
trading Enterprises,” and during the month, the following transaction were completed:
 Dec 1- Remeses Balungaya invested PHP. 300 000
 Dec 1- Bought an equipment and supplies amounting to PHP. 45 000 and PHP. 20 000,
respectively. After that, bought a vehicle amounting to PHP.950 000 with a down payment
of PHP. 50 000 from Oshiro Merchandising, Oshiro Merchandising issued a note for unpaid
balance.
 Dec. 1- Paid Taxes and Licenses to BIR amounting to PHP. 3 500
 Dec. 2- Paid PHP. 3 500 to an advertising company.
 Dec. 4- Bought Furniture and Fixtures amounting to PHP. 18 500 on account.
 Dec. 5- Received a cash amounting to PHP. 6 750 from various customers.
 Dec. 6- Rendered services to Edi Wow Company amounting to PHP. 12 800, and received
an amount of PHP. 5 000.
 Dec. 8- Rendered services to Wang Wong Company amounting to PHP. 15 800, and
received an amount of PHP. 10 500
 Dec. 9- Bought supplies amounting to PHP. 9 875 with a down payment of PHP. 5 000, the
seller issued a note for the balance.
 Dec. 10- Received an amount of PHP. 7 800 from the full payment of Edi Wow Company.
 Dec. 11- Received PHP. 10 000 from various customers.
 Dec. 12- Remeses Balungaya bought a printer amounting PHP. 6 500 for his son’s school
works.
 Dec. 14- Bought supplies amounting to PHP. 10 500
 Dec. 15- Paid a 5-month rent of the business worth PHP. 20 000, and already used a half-
month which recorded as expenses.
 Dec. 16- Paid his worker amounting to PHP. 7 850.
 Dec. 16- Received the full payment of Wang Wong Company. Received an amount of PHP.
7 500 from various customers.
 Dec. 17- Bought a Tools amounting to PHP. 15 950 on account, and received PHP. 3 450
from various company.
 Dec. 18- Paid the Notes payable issued last Dec. 9
 Dec. 19- Used Gas and Oil amounting to PHP. 2 375.
 Dec. 20- Rendered service to Manna Cupule Merchandising amounting to PHP. 18 025
and received an amount of PHP. 8 025, Balungaya’s Multi-trading Enterprises issued a note
for the balance.
 Dec. 20- Paid miscellaneous bills amounting to PHP.325
 Dec. 21- Bought Supplies amounting to PHP. 8 345, and billed Bonggutela Gorospe for the
rendered service amounting to PHP. 26 750.
 Dec. 24- Received PHP. 5 230 from various customers.
  Dec. 27- Bought supplies amounting to PHP. 4 950.
 Dec. 28- Received an amount of PHP. 5 000 from various customers, and paid the wages
of the employees amounting to PHP. 7 850.

At the end of the month the following data are gathered:

e. It is estimated that 5% of the outstanding receivable will be uncollectible.
f. Store equipment was purchased on December 1 of the current year and is expected to be
useful for 6 years at the end of which, it can be sold for PHP. 800
g. Store vehicle was purchased on December 1 of the current year and is expected to be useful
for 10 years at the end of which, it can be sold at PHP. 75 000
h. The actual count of supplies revealed a balance of PHP. 10 000

Requirement.
 Accounting Cycle
 MONTOYA’S SEWING SERVICES
CHART OF ACCOUNTS

ASSET
111 Cash
112 Accounts Receivable
112a Allowance for Bad Debts
113 Equipment
113a Accumulated Depreciation- Equipment
114 Supplies
115 Vehicle
115a Accumulated Depreciation- Vehicle
116 Furniture and Fixtures
116a Accumulated Depreciation- Furniture and Fixtures
117 Prepaid Rent
118 Tools
119 Notes Receivables

LIABILITY
211 Notes Payable
212 Accounts Payable

OWNER’S EQUITY
311 R. Balungaya, Capital
312 R. Balungaya, Drawing
313 Income and Expense Summary

INCOME
411 Service Revenue

EXPENSES
511 Wages Expense
512 Taxes and Licenses Expense
513 Miscellaneous Expense
514 Gas and Oil Expense
515 Advertising Expense
516 Rent Expense
JOURNAL ENTRIES
General Journal
DATE EXPLANATION F DEBIT CREDIT
2019
Dec 1 Cash 111 PHP. 300 000
M. Balungaya, Capital 311 PHP. 300 000
“To record the initial investment”

Equipment 113 45 000

Cash 111 45 000
“To record the buying of equipment”

Supplies 114 20 000

Cash 111 20 000
“To record the buying of Supplies”

Vehicle 115 950 000

Cash 111 50 000
Notes Payable 211 900 000
“To record the buying of vehicle on
account with notes”

Taxes and Licenses Expense 512 3 500

Cash 111 3 500
“To record the paying of Taxes and
Licenses”

2 Advertising Expense 515 3 500

Cash 111 3 500
“To record the paying of advertising
bills”

4 Furniture and Fixtures 116 18 500

Accounts Payable 111 18 500
“To record the buying of furniture and
fixtures”

5 Cash 111 6 750

Service Revenue 411 6 750
 “To record the cash received from
rendered services”

6 Cash 111 5 000

Accounts Receivable 112 7 800
Service Revenue 411 12 800
“To record the cash received from
Edi Wow company, and the balance
is payable”

8 Cash 111 10 500

Accounts Receivable 112 5 300
Service Revenue 411 15 800
“To record the cash received from
Wong Wang Company, and the
balance is payable”

9 Supplies 114 9 875

Cash 111 5 000
Notes Payable 211 4 875
“To record the buying of supplies,
and the balance is payable with a
note”

10 Cash 111 7 800

Accounts Receivable 112 7 800
“To record the full payment of Edi
Wow Company”

11 Cash 111 10 000

Service Revenue 411 10 000
“To record the cash received from
rendered services”

12 R. Balungaya, Drawing 312 6 500

Cash 111 6 500
“To record the cash withdraw by R.
Balungaya for buying his Son’s
printer”
14 Supplies 114 10 500
Cash 111 10 500
“To record the buying of Supplies”

15 Prepaid Rent 117 18 000

Rent Expense 111 2 000 20 000
Cash
“To record the advance payment of
rent and the expense”

16 Wages Expense 511 7 850

Cash 111 7 850
“To record the payment of wages”

Cash 111 5 300

Accounts Receivable 112 5 300
“To record the full payment of Wang
Wong Company”

Cash 111 7 500

Service Revenue 411 7 500
“To record the cash received from
rendered services”

17 Tools 118 15 950

Accounts Payable 212 15 950
“To record the buying of tools on
account”

Cash 111 3 450

Service Revenue 411 3 450
“To record the cash received from
rendered services”

18 Notes Payable 111 4 875

Cash 211 4 875
“To record the paying of notes
payable issues last Dec. 9”

19 Gas & Oil Expense 514 2 375

 Cash 111 2 375
“To record the using of Gas and Oil”

20 Cash 111 8 025

Notes Receivable 119 10 000
Service Revenue 411 18 025
“To record the cash received from
Manna Cupule Merchandising, the
balance was issued by a note”

Miscellaneous Expense 513 325

Cash 111 325
“To record the paying of
miscellaneous bills”

21 Supplies 114 8 345

Cash 111 8 345
“To record the buying of supplies”

Accounts Receivable 112 26 750

Service Revenue 411 26 750
“To record the debt of B. Gorospe
from rendered service”

24 Cash 111 5 230

Service Revenue 411 5 230
“To record the cash received from
rendered services”

27 Supplies 114 4 950

Cash 111 4 950
“To record the buying of supplies”

28 Cash 111 5 000

Service Revenue 411 5 000
“To record the cash received from
rendered services”
511 7 850
Wages Expense 111 7 850
Cash
“To record the payment of wages”
POSTING
CASH- 111
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Dec 1 “To record the 111 P300 000 Dec 1 “To record the 111 P45 000
initial investment” buying of
5 To record the cash 6 750 equipment”
received from “To record the 20 000
rendered services” buying of
6 “To record the 5 000 Supplies”
cash received from “To record the 50 000
Edi Wow buying of vehicle
company, and the on account with
balance is notes”
payable” “To record the 3 500
8 “To record the 10 500 paying of Taxes
cash received from and Licenses”
Wong Wang 2 “To record the 3 500
Company, and the paying of
balance is advertising bills”
payable” 9 “To record the 5 000
10 “To record the full 7 800 buying of
payment of Edi supplies, and the
Wow Company” balance is
11 “To record the 10 000 payable with a
cash received from note”
rendered services” 12 “To record the 6 500
16 “To record the full 5 300 cash withdraw by
payment of Wang R. Balungaya for
Wong Company” buying his Son’s
“To record the 7 500 printer”
cash received from 14 “To record the 10 500
rendered services” buying of
17 “To record the 3 450 Supplies”
cash received from 15 “To record the 18 000
rendered services” advance
20 “To record the 8 025 payment of rent
cash received and the expense”
from Manna “To record the 2 000
Cupule advance
 Merchandising, the payment of rent
balance was and the expense”
issued by a note” 16 “To record the 7 850
24 “To record the 5 230 payment of
cash received from wages”
rendered services” 18 “To record the 4 875
28 “To record the 5 000 paying of notes
cash received from payable issues
rendered services” last Dec. 9”
19 “To record the 2 375
using of Gas and
Oil”
20 “To record the 325
paying of
miscellaneous
bills”
21 “To record the 8 345
buying of
supplies”
27 “To record the 4 950
buying of
supplies”
28 “To record the 7 850
payment of
wages”

Total 374 555 Total 200 570

Balance P 173 985

ACCOUNTS RECEIVABLE-112
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Dec 6 “To record the 112 P 7 800 Dec10 “To record the 112 P 7 800
cash received from full payment of
Edi Wow company, Edi Wow
and the balance is Company”
payable” 16 “To record the 5 300
8 “To record the 5 300 full payment of
cash received from Wang Wong
Wong Wang Company”
 Company, and the
balance is
payable”
21 “To record the debt
of B. Gorospe from
rendered service” 26 750

Total 39 850
Balance 26 750 Total 13 100

EQUIPMENT-113
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec 1 “To record the 113 P 45 000
buying of
equipment”

Total 45 000
Balance 45 000

SUPPLIES-114
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec 1 “To record the 114 P 20 000
buying of Supplies”
9 “To record the 9 875
buying of supplies,
and the balance is
payable with a
note
14 “To record the 10 500
buying of Supplies”
21 “To record the 8 345
buying of supplies”
27 “To record the 4 950
buying of supplies”

Total 53 670
Balance P 53 670
 VEHICLE-115
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec 1 “To record the 115 P950 000
buying of vehicle
on account with
notes”

Total 900 000

Balance P950 000

FURNITURE AND FIXTURES -116

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec 4 “To record the 116 P 18 500
buying of furniture
and fixtures”

Total 18 500
Balance P 18 500

PREPAID RENT -117

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec15 “To record the 117 P 18 000
buying of furniture
and fixtures”

Total 18 000
Balance P 18 000
 TOOLS -118
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec17 “To record the 118 P 15 950
buying of tools on
account”

Total 15 950
Balance P 15 950

NOTES RECIEVABLES-119
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec20 “To record the 119 P 10 000
cash received
from Manna
Cupule
Merchandising, the
balance was
issued by a note”

Total 10 000
Balance P 10 000

NOTES PAYABLE- 211

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Dec 18 “To record the 211 P 4 875 Dec 1 “To record the 211 P 900 000
paying of notes buying of vehicle
payable issues on account with
last Dec. 9” notes”
9 “To record the 4 875
buying of
supplies, and the
balance is
payable with a
note”

Total 4 875 Total 904 875

Balance P 900 000
 ACCOUNTS PAYABLE- 212
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec 4 “To record the 212 P 18 500
buying of
furniture and
fixtures”
“To record the
buying of tools
17 on account” 15 950

Total
Balance
34 450
P 34 450

R. BALUNGAYA, CAPITAL -311

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec 1 “To record the 311 P 300 000
initial investment”

Total 300 000

Balance P 300 000

R. BALUNGAYA, DRAWING -312

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec12 “To record the 312 P 6 500
cash withdraw by
R. Balungaya for
buying his Son’s
printer”

Total 6 500
Balance P 6 500
 SERVICE REVENUE -411
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
Dec 5 “To record the 411 6 750
cash received
from rendered
services”
6 “To record the 12 800
cash received
from Edi Wow
company, and
the balance is
payable”
8 “To record the 15 800
cash received
from Wong Wang
Company, and
the balance is
payable”
11 “To record the 10 000
cash received
from rendered
services”
16 “To record the 7 500
cash received
from rendered
services”
17 “To record the 3 450
cash received
from rendered
services”
20 “To record the 18 025
cash received
from Manna
Cupule
Merchandising,
the balance was
issued by a note”
21 “To record the 26 750
debt of B.
 Gorospe from
rendered service”
24 “To record the 5 230
cash received
from rendered
services”
28 “To record the 5 000
cash received
from rendered
services”

Total 111 305

Balance P 111 305

WAGES EXPENSE -511

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec16 “To record the 511 P 7 850
payment of wages”
28 “To record the 7 850
payment of wages”

Total 15 700
Balance P 15 700

TAXES AND LICENSES EXPENSE -512

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec 1 “To record the 512 P 3 500
paying of Taxes
and Licenses”

Total 3 500
Balance P 3 500
 MISCELLANEOUS EXPENSE -513
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec20 “To record the 513 P 325
paying of
miscellaneous
bills”

Total 325
Balance P 325

GAS AND OIL EXPENSE -514

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec19 “To record the 514 P 2 375
using of Gas and
Oil”
Total 2 375
Balance P 2 375

ADVERTISING EXPENSE -515

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec 2 “To record the 515 P 3 500
paying of
advertising bills”

Total 3 500
Balance P 3 500

RENT EXPENSE -516

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Dec 2 “To record the 516 P 2 000
advance payment
of rent and the
paying of rent bills”

Total 2 000
Balance P 2 000
UNADJUSTED TRIAL BALANCE

BALUNGAYA’S MULTI-TRADING ENTERPRISES

UNADJUSTED TRIAL BALANCE
DECEMBER 31, 2019

DEBIT CREDIT
Cash P 173 985
Accounts Receivable 26 750
Equipment 45 000
Supplies 53 670
Vehicle 950 000
Furniture and fixtures 18 500
Prepaid Rent 18 000
Tools 15 950
Notes Receivables 10 000
Notes Payable P 900 000
Accounts Payable 34 450
R. Balungaya, Capital 300 000
R. Balungaya, Drawing 6 500
Service Revenue 111 305
Wages Expense 15 700
Taxes and Licenses Expense 3 500
Miscellaneous Expense 325 .
Gas and Oil Expense 2 375
Advertising Expense 3 500
Rent Expense 2 000
P 1 345 755 P 1 345 755
ADJUSTING ENTRIES

DEBIT CREDIT

g. Bad Debts Expense P 1 337.5

Allowance for Bad Debts P 1 337.5

h. Depreciation Expense 613.89

Accumulated Depreciation-Equipment 613.89

i. Depreciation Expense 6 076.39

Accumulated Depreciation-Vehicle 6 076.39

j. Supplies Expense 43 670

Supplies 43 670

k. Rent Expense 2 000

Prepaid Rent 2 000
ADJUSTED TRIAL BALANCE

BALUNGAYA’S MULTI-TRADING ENTERPRISES

ADJUSTED TRIAL BALANCE
DECEMBER 31, 2019

DEBIT CREDIT
Cash P 173 985
Accounts Receivable 26 750
Allowance for Bad Debts 1 337.5
Equipment 45 000
Accumulated Depreciation- 613.89
Equipment
Supplies 10 000
Vehicle 950 000
Accumulated Depreciation- 6 076.39
Vehicle
Furniture and fixtures 18 500
Prepaid Rent 16 000
Tools 15 950
Notes Receivables 10 000
Notes Payable P 900 000
Accounts Payable 34 450
R. Balungaya, Capital 300 000
R. Balungaya, Drawing 6 500
Service Revenue 111 305
Wages Expense 15 700
Taxes and Licenses Expense 3 500
Miscellaneous Expense 325 .
Gas and Oil Expense 2 375
Advertising Expense 3 500
Rent Expense 4 000
Bad Debts Expense 1 337.5
Depreciation Expense 6 690.28
Supplies Expense 43 670
P 1 353 782.78 P 1 353 782.78
 BALUNGAYA’S MULTI-TRADING ENTERPRISES
STATEMENT OF INCOME
For the Year-Ended DECEMBER 31, 2019

Revenues
Service Revenue P 111 305
Expenses
Wages Expense P 15 700
Taxes and Licenses Expense 3 500
Miscellaneous Expense 325
Gas and Oil Expense 2 375
Advertising Expense 3 500
Rent Expense 4 000
Bad Debts Expense 1 337.5
Depreciation Expense 6 690.28
Supplies Expense 43 670 (81 097.78)
Net income P 30 207.22
 BALUNGAYA’S MULTI-TRADING ENTERPRISES
STATEMENT OF CHANGES IN EQUITY
For the Year-Ended DECEMBER 31, 2019

R. Balungaya, Capital P 300 000

Total Capital 300 000
Withdrawal (6 500)
Net Capital 293 500
Net Income 30 207.22
Ending Capital P 323 707.22
 BALUNGAYA’S MULTI-TRADING ENTERPRISES
STATEMENT OF CASH FLOW
For the Year-Ended DECEMBER 31, 2019

Cash Flow from Operating Activities

Cash receipts from rendering of services P 74 555
Cash payments to acquire short-term asset (48 795)
Cash payments to employees (15 700)
Cash payment to operating expenses (11 700)
Cash payments to acquire rent (18 000)
Net cash flow from operating activities P (19 640)
Cash Flow from Investing Activities
Cash payments to acquire property, plant, and equipment P (95 000)
Cash outflow to notes payable (4 875)
Net cash flow from investing activities P (99 875)
Cash Flow from Financing Activities
Proceeds from cash investment of owner P 300 000
Cash withdrawal of the owner (6 500)
Net cash flow from financing activities P 293 500

Net increase in cash P 173 985

Cash at the end of the Period P 173 985
 BALUNGAYA’S MULTI-TRADING ENTERPRISES
STATEMENT OF FINANCIAL POSITION
As of the Year-Ended DECEMBER 31, 2019

Current Asset
Cash P 173 985
Accounts Receivable 26 750
Allowance for Bad Debts (1 337.5)
Supplies 10 000
Prepaid Rent 16 000
Tools 15 950
Total Current Asset P 241 347.5
Non-Current Asset
Equipment P 45 000
Accumulated Depreciation-Equipment (613.89)
Vehicle 950 000
Accumulated Depreciation-Vehicle (6 076.39)
Notes Receivables 10 000
Furniture and fixtures 18 500
Total Non-Current Asset P 1 016 809.72
Total Asset P 1 258 157.22
Current Liability
Accounts Payable P 34 450
Total Liability P 34 450
Non-Current Liability
Notes Payable P 900 000
Total Liability P 900 000
Total Liability P 934 450
Equity
M.L. Padilla, Capital P 323 707.22
Total Liabilities + Equity P 1 258 157.22
CLOSING ENTRIES

DEBIT CREDIT

Income Summary P 81 097.78

Wages Expense P 15 700
Taxes and Licenses Expense 3 500
Miscellaneous Expense 325
Gas and Oil Expense 2 375
Advertising Expense 3 500
Supplies Expense 43 670
Bad Debts Expense 1 337.5
Rent Expense 4 000
Depreciation Expense 6 690.28

Service Revenue 111 305

Income Summary 111 305

Income Summary 30 207.22

M.L. Padilla, Capital 30 207.22

M.L. Padilla, Capital 6 500

M.L. Padilla, Drawing 6 500
 BALUNGAYA’S MULTI-TRADING ENTERPRISES
POST-CLOSING TRIAL BALANCE
DECEMBER 31, 2019

DEBIT CREDIT
Cash P 173 985
Accounts Receivable 26 750
Allowance for Bad Debts 1 337.5
Equipment 45 000
Accumulated Depreciation- 613.89
Equipment
Supplies 10 000
Vehicle 950 000
Accumulated Depreciation- 6 076.39
Vehicle
Furniture and fixtures 18 500
Prepaid Rent 16 000
Tools 15 950
Notes Receivables 10 000
Notes Payable P 900 000
Accounts Payable 34 450
R. Balungaya, Capital 323 707.22
P 1 266 185 P 1 266 185
PROBLEM 3
 Jan. 2- The proprietor C&Q’s Trading, Miss Camilla Dela Cruz, invested PHP. 150 000 in
cash, PHP. 10 000 in store furniture, and PHP. 18 000 in merchandise. Her liability of PHP.
5 000 to Mons Trading on the merchandise was assumed by the business.
 Jan.3- Paid PHP. 580 for business permits.
 Jan.4- Paid in advance PHP. 8 000 rent for two months to Lungaya Realty.
 Jan.5- Bought store equipment from E. Toya Enterprises. Terms: 1/10, n/30, PHP. 12 000
 Jan.7- Received a 15-day, 8% note from Lovoro’s Store for goods sold, PHP. 9 000.
 Jan. 7- Discounted a PHP. 6 000, 90-day note at 6% with Salo-Salo Financing.
 Jan.7- Paid the outstanding accounts with Mons trading.
 Jan.8- Made purchases of goods from:
Unity Distributors, PHP. 20 000. Terms: 10%, 5%, 2/10, n/30.
Champi Wholesalers, PHP. 10 800. Terms: n/15
 Jan.9- Sold goods to Suresa Store, PHP. 15 500. Terms: PHP. 3 000 down, a 20-day note
for PHP. 10 000; balance 2/10, n/30.
 Jan.10- Deposited PHP. 45 000 in a current account with BPI.
 Jan.10- Champi Wholesalers had granted the request for credit of PHP. 1 000 on account
of defective merchandise.
 Jan.11- Issued a check for PHP. 20 500 for goods bought from Mons trading.
 Jan.12- The account with E. Toya Enterprises was paid in full by check.
 Jan.12- Issued a credit memo to Suresa Store to cover a PHP. 500 allowance on the sales
made on the 9th.
 Jan.13- The account with Champi Wholesalers was settled by the issuance of a 10-day, non-
interest bearing a note dated today.
 Jan.13- received a cash refund of PHP. 1 200 from Mons trading for merchandise returned.
 Jan.14- Paid PHP. 5 000 to Unity Distributors.
 Jan.14- Cash sales today, PHP. 30450.
 Jan.15- Payroll of PHP. 5 000, was paid less deduction of P420 for withholding taxes, PHP.
800 for SSS and PHP. 250 for Medicare.
 Jan.16- Goods bought by Jojo Store were delivered today, PHP. 19 000. Terms: C.O.D.
 Jan.17- Suresa Store gave a check in full payment of accounts.
 Jan.17- Sales were made to the following:
JP’s store ---- PHP. 10 000. Terms: 1/10, n/30.
Lorelie Store ---- PHP. 24 000. Terms: n/30.
 Jan.18- Deposited the check received from Suresa store and P 12,000 in cash.
 Jan.18- Refunded PHP. 700 to Jojo Store for unsatisfactory merchandise.
 Jan.18- Paid in full the account with Unity Distributors.
 Jan.19- Purchased merchandise from Champi Wholesalers, PHP. 80 000. Terms: 20%
down; a 60-day, 6% note for PHP. 40 000; 2/10, n/30.
  Jan.19- Paid freight on goods bought, PHP. 620.
 Jan.22- Received check from JP Store in full payment of accounts.
 Jan.22- Collected the note from Lovoro’s Store.
 Jan.23- Paid the 10-day note to Champi Wholesalers.
 Jan.25- The proprietor took home money for personal use, PHP. 800.
 Jan.27- Issued a check in the amount of PHP. 1 500 as advance payment of wages of
employees.
 Jan.29- Collected the note from Suresa Store.
 Jan.31- Payroll of PHP. 5 000 for the second half of the month was paid, less deduction of
PHP. 420 for withholding taxes, PHP. 800 for SSS, PHP. 250 for Medicare and the advances
on the 27th.

At the end of the month, the following data are gathered:

i. It is estimated that only 90% of outstanding accounts receivables will be good and
collectible.
j. The store equipment are estimated to have 3-year useful life
k. The store furniture are estimated to have 2-year useful life.
l. Ending Inventory: PHP. 18 000
Requirement.
 Accounting Cycle
 C&Q’S TRADING
CHART OF ACCOUNTS

ASSET
111 Cash on Hand
112 Cash in Bank
113 Notes Receivable
114 Accounts Receivables
115 Advances to Employees
116 Merchandise Inventory
117 Prepaid Rent
118 Store Furniture
119 Store Equipment

LIABILITY
211 Accounts Payable
212 Notes Payable
213 Withholding Taxes Payable
214 SSS Contributions Payable
215 Medicare Contributions Payable

OWNER’S EQUITY
311 C. Dela Cruz, Capital
312 C. Dela Cruz, Drawing

INCOME
411 Sales
412 Sales Returns and Allowances
413 Sales Discounts

COST OF GOODS SOLD

511 Purchases
512 Purchases Returns and Allowances
513 Purchases Discounts
504 Freight In

OPERATING EXPENSES
611 Wages Expense
612 Taxes and Licenses
613 Interest Income
614 Interest Expense
JOURNAL ENTRIES

DATE EXPLANATION F DEBIT CREDIT

2019
Jan 2 Cash on Hand 111 PHP. 150 000
Store Furniture 118 10 000
Merchandise inventory 116 18 000
Accounts Payable 211 PHP. 5 000
C. Dela Cruz, Capital 311 173 000
“Initial investment”

3 Taxes & Licenses 612 580

Cash on Hand 111 580
“Payment of registration fees”

4 Prepaid Rent 117 8 000

Cash on Hand 111 8 000
“Advance rentals”

5 Store Equipment 119 12 000

Accounts Payable 211 12 000
1/10, n/30
“Purchase of equipment on account”

7 Notes Receivables 113 9 000

Sales 411 9 000
15-day, 8% note
“Sales from Lovoro’s Store”

Cash on Hand 111 5 910

Interest Expense 614 90
Notes Payable 212 6 000
90-day, 6% note
“Borrowed Money”

Accounts Payable 211 5 000

Cash on Hand 111 5 000
“Settlement with Real Trading ”
 8 Purchases 511 27 900
Accounts payable 211 27 900
Unity Distributors: 2/10, n/30
Champi Wholesalers: n/15
“To record purchases”

9 Cash on Hand 111 3 000

Notes Receivables 113 10 000
Accounts Receivables 114 2 500
Sales 411 15 500
20-day note, 2/10, n/30
“Sales from Suresa Store”

10 Cash in Bank 112 45 000

Cash on Hand 111 45 000
“Deposit at BPI”

Accounts Payable 211 1 000

Purchase Returns & Allowances 512 1 000
“Allowance granted by CW”

11 Purchases 511 20 500

Cash in Bank 112 20 500
“Purchase of goods from Mons Trading”

12 Accounts Payable 211 12 000

Store Equipment 119 120
Cash in Bank 112 11 880
“Payment to E. Toya Enterprises”

Sales Returns & Allowances 412 500

Accounts Receivables 114 500
“Credit memo to Suresa Store”

13 Accounts Payable 211 9 800

Notes Payable 212 9 800
10-day note

Cash on Hand 111 1 200

Purchase Returns & Allowances 512 1 200
 “Cash refund from Real Trading”

14 Accounts Payable 211 5 000

Cash on Hand 111 5 000
“Partial payment to UD”

Cash on Hand 111 90 450

Sales 411 90 450
“Total Cash sales”

15 Wages Expense 611 5 000

Withholding Tax Payable 213 420
SSS Contributions Payable 214 800
Medicare Contributions Payable 215 250
Cash on Hand 111 3 530
“Payroll for the first half of the month”

16 Cash on Hand 111 19 000

Sales 411 19 000
C.O.D.

17 Cash on Hand 111 1 960

Sales Discount 413 40
Accounts Receivable 114 2 000
“In full of Suresa’s account”
114
Accounts Receivables 34 000
Sales 411 34 000
JP’s Store- 1/10, n/30
Lorelie Store – n/20

18 Cash in Bank 112 13 960

Cash on Hand 111 13 960
“Deposit in BPI”

Sales Returns and Allowances 412 700

Cash on Hand 111 700
“Cash refund to Joan Store”
 Accounts Payable 211 12 100
Purchase discount 513 342
Cash on Hand 111 11 758
“Payment to Unity Distributors”

19 Purchases 511 80 000

Cash on Hand 111 16 000
Notes Payable 212 40 000
Accounts payable 211 24 000
60-day, 6% note; 2/10, n/30

Freight in 620
Cash on Hand 514 620
“Freight on goods bought”

22 Cash on Hand 111 9 900

Sales Discount 513 100
Account Receivables 114 10 000
“Collection of Accounts”

Cash on Hand 111 9 030

Notes Receivable 113 9 000
Interest Income 613 30
“Collection of note”

23 Notes Payable 212 9 800

Cash on Hand 111 9 800
“Payment of a 10-day note”

25 Q. Camilla, Drawing 312 800

Cash on hand 111 800
“Withdrawal of cash”

27 Advances to Employees 115 1 500

Cash in Bank 112 1 500
“Check issued for advances”

29 Cash on Hand 111 10 000

Notes Receivable 113 10 000
“Collection of Note”
31 Wages Expense 611 5 000
Withholding taxes payable 213 420
SSS Contributions Payable 214 800
Medicare Contributions Payable 215 250
Advances to Employees 115 1 500
Cash in Bank 112 2 030
“Payroll for the second half of the month”
POSTING
CASH ON HAND- 111
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 2 “Initial investment” 111 P 150 000 Jan 3 “Payment of 111 P 580
7 “Borrowed Money” 5 910 registration fees”
9 “Sales from 3 000 4 “Advance 8 000
Suresa Store” rentals”
13 “Cash refund from 1 200 7 “Settlement with 5 000
Real Trading” Real Trading ”
14 “Total Cash sales” 90 450 10 “Deposit at BPI” 45 000
16 C.O.D. 19 000 14 “Partial payment 5 000
17 “In full of Suresa’s 1 960 to UD”
account” 15 “Payroll for the 3 530
22 “Collection of 9 900 first half of the
Accounts” month”
22 “Collection of note” 9 030 18 “Deposit in BPI” 13 960
29 “Collection of 10 000 18 “Cash refund to 700
Note” Joan Store”
18 “Payment to 11 758
Unity
Distributors”
19 60-day, 6% note; 16 000
2/10, n/30
19 “Freight on 620
goods bought”
23 “Payment of a 9 800
10-day note”
25 “Withdrawal of 800
cash”

Total 3000 450 Total 120 748

Balance P 179 702
 CASH IN BANK- 112
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan10 “Deposit at BPI” 112 P 45 000 Jan11 “Purchase of 112 P 20 500
18 “Deposit in BPI” 13 960 goods from Mons
Trading”
12 “Payment to E. 11 880
Toya
27 Enterprises” 1 500
“Check issued for
advances”
31 “Payroll for the 2 030
second half of the
month”

Total 58 960 Total 35 910

Balance P 23 050

NOTES RECEIVABLE- 113

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 7 “Sales from 113 P 9 000 Jan22 “Collection of 113 P 9 000
Lovoro’s Store” note”
9 “Sales from 10 000 29 “Collection of 10 000
Suresa Store” Note”

Total 19 000 Total 19 000

Balance P0

ACCOUNTS RECEIVABLE- 114

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 9 “Sales from 114 P 2 500 Jan12 “Credit memo to 114 P 500
Suresa Store” Suresa Store”
17 JP’s Store- 1/10, 34 000 17 “In full of 2 000
n/30 Suresa’s
Lorelie Store - n/20 account”
“Collection of
22 Accounts” 10 000
 Total
Total 36 500 12 500
Balance P 24 000
ADVANCES TO EMPLOYEES - 115
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan27 “Check issued for 115 P 1 500 Jan31 “Payroll for the 115 P 1 500
advances” second half of the
month”

Total 1 500 Total 1 500

Balance P0

MERCHANDISE INVENTORY - 116

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 2 “Initial investment” 116 P 18 000 Jan25 113

Total 18 000
Balance P 18 000

ADVANCE RENTALS - 117

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 4 “Advance rentals” 117 P 8 000

Total 8 000
Balance P 8 000

STORE FURNITURE - 118

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 2 “Initial investment” 118 P 10 000

Total 10 000
Balance P 10 000
 STORE EQUIPMENT - 119
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 5 “Purchase of 119 P 12 000 Jan12 “Payment to E. 119 P 120
equipment on Toya
account” Enterprises”

Total 12 000 Total 120

Balance P 11 880

ACCOUNTS PAYABLE - 211

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 7 “Settlement with 211 P 5 000 Jan 2 “Initial 211 P 5 000
Real Trading ” investment”
10 “Allowance 1 000 5 “Purchase of 12 000
granted by CW” equipment on
12 “Payment to E. 12 000 account”
Toya Enterprises” 8 “To record 27 900
13 10-day note 9 800 purchases”
14 “Partial payment to 5 000 19 60-day, 6% note; 24 000
UD” 2/10, n/30
18 “Payment to Unity 12 100
Distributors”

Total 44 900 Total 68 900

Balance P 24 000

NOTES PAYABLE - 212

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan23 “Payment of a 10- 212 P 9 800 Jan 7 Borrowed 212 P 6 000
day note” Money”
13 10-day note 9 800
19 60-day, 6% note; 40 000
2/10, n/30
Total 9 800 Total 55 800
Balance P 46 000
 WITHHOLDING TAXES PAYABLE - 213
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan15 “Payroll for the 213 P 420
first half of the
month”
31 “Payroll for the 420
second half of the
month”

Total 840
Balance P 840

SSS CONTRIBUTIONS PAYABLE - 214

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan15 “Payroll for the 214 P 800
first half of the
month”
31 “Payroll for the 800
second half of the
month”

Total 1 600
Balance P 1 600

MEDICARE CONTRIBUTIONS PAYABLE - 215

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan15 “Payroll for the 215 P 250
first half of the
month”
31 “Payroll for the 250
second half of the
month”
Total 500
Balance P 500
 C. DELA CRUZ, CAPITAL - 311
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 2 “Initial 311 P 173 000
investment”

Total 173 000

Balance P 173 000

C. DELA CRUZ, DRAWING - 312

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan25 “Withdrawal of 312 P 800
cash”

Total 800
Balance P 800

SALES - 411
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 7 “Sales from 411 P 9 000
Lovoro’s Store”
9 “Sales from 15 500
Suresa Store”
14 “Total Cash 90 450
sales”
16 C.O.D. 19 000
17 JP’s Store- 1/10, 34 000
n/30
Lorelie Store –
n/20
Total 167 950
Balance P 167 950
 SALES RETURNS AND ALLOWANCES - 412
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan18 “Cash refund to 412 P 700
Joan Store”
12 “Credit memo to 500
Suresa Store”

Total 1 200
Balance P 1 200

SALES DISCOUNTS - 413

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan17 “In full of Suresa’s 413 P 40
account”
22 “Collection of 100
Accounts”

Total 140
Balance P 140

PURCHASES - 511
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 8 “To record 511 P 27 900
purchases”
11 “Purchase of goods 20 500
from Mons Trading”
19 60-day, 6% note; 80 000
2/10, n/30

Total 128 400

Balance P 128 400
 PURCHASES RETURNS AND ALLOWANCES - 512
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan10 “Allowance 511 P 1 000
granted by CW”
“Cash refund
from Real
13 Trading” 1 200

Total
Balance
2 200
P 2 200

PURCHASES DISCOUNTS - 513

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan18 “Payment to 513 P 342
Unity
Distributors”

Total 342
Balance P 342

FREIGHT IN - 514
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Jan19 “Freight on goods 514 P 620
bought”

Total 620
Balance P 620
 WAGES EXPENSE - 611
DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan15 “Payroll for the first 611 P 5 000
half of the month”
“Payroll for the
second half of the
31 month” 5 000

Total
Balance
10 000
P 10 000

TAXES AND LICENSES - 612

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 3 “Payment of 612 P 580
registration fees”

Total 580
Balance P 580

INTEREST INCOME - 613

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019
Jan22 “Collection of 613 P 30
note”

Total 30
Balance P 30

INTEREST EXPENSE - 614

DATE EXPLANATION F DEBIT DATE EXPLANATION F CREDIT
2019 2019
Jan 7 “Collection of note” 614 P 90

Total 90
Balance P 90
UNADJUSTED TRIAL BALANCE

C&Q’S TRADING
UNADJUSTED TRIAL BALANCE
JANUARY 31, 2019

DEBIT CREDIT
Cash on Hand P 179 702
Cash in Bank 23 050
Notes Receivable 0
Accounts Receivable 24 000
Advances To Employees 0
Merchandise Inventory 18 000
Advance Rentals 8 000
Store Furniture 10 000
Store Equipment 11 880
Accounts Payable P 24 000
Notes Payable 46 000
Withholding Taxes Payable 840
SSS Contributions Payable 1 600
Medicare Contributions 500
Payable
C. Dela Cruz, Capital 173 000
C. Dela Cruz, Drawing 800
Sales 167 950
Sales Returns & Allowances 1 200
Sales Discounts 140
Purchases 128 400
Purchases Returns 2 200
Allowances
Purchases Discounts 342
Freight In 620
Wages Expense 10 000
Taxes and Licenses 580
Interest Income 30
Interest Expense 90 .
P 416 462 P 416 462
ADJUSTING ENTRIES

DEBIT CREDIT

l. Bad Debts Expense P 2 400

Allowance for Bad Debts P 2 400

m. Depreciation Expense- Store Equipment 330

Accumulated Depreciation- Store Equipment 330

n. Rent Expense 4 000

Advance Rentals 4 000

a. Depreciation Expense- Store Furniture 416.67

Accumulated Depreciation- Store Furniture 416.67
ADJUSTED TRIAL BALANCE
C&Q’S TRADING
ADJUSTED TRIAL BALANCE
JANUARY 31, 2019
DEBIT CREDIT
Cash on Hand P 179 702
Cash in Bank 23 050
Notes Receivable 0
Accounts Receivable 24 000
Allowance for Bad Debts P 2 400
Advances To Employees 0
Merchandise Inventory 18 000
Advance Rentals 4 000
Store Furniture 10 000
Store Equipment 11 880
Accumulated Depreciation- Store Furniture 416. 67
Accumulated Depreciation- Store Equipment 330
Accounts Payable 24 000
Notes Payable 46 000
Withholding Taxes Payable 840
SSS Contributions Payable 1 600
Medicare Contributions Payable 500
C. Dela Cruz, Capital 173 000
C. Dela Cruz, Drawing 800
Sales 167 950
Sales Returns & Allowances 1 200
Sales Discounts 140
Purchases 128 400
Purchases Returns Allowances 2 200
Purchases Discounts 342
Freight In 620
Wages Expense 10 000
Taxes and Licenses 580
Interest Income 30
Interest Expense 90
Depreciation Expense- Store Equipment 330
Depreciation Expense- Store Furniture 416.67
Rent Expense 4 000
Bad Debts Expense 2 400 .
P 419 608.67 P 419 608.67
 C&Q’S TRADING
STATEMENT OF INCOME
For the Month-Ended JANUARY 31, 2019

Sales P 167 950

Sales Returns and allowances (1 200)
Sales Discounts (140)
Net sales 166 610

Cost of Goods Sold

Beginning Inventory P 18 000
Purchases P 128 400
Purchase Returns and Allowances (2 200)
Purchase Discounts (342)
Freight In 620
Net Purchases 126 478
Cost of Goods Available for Sale 143 238
Ending Inventory (18 000)
Cost of Goods Sold (126 478)
Gross Income 40 132
Less: Operating Expenses
Wages Expense (10 000)
Depreciation Expense- Store Equipment (330)
Depreciation Expense- Store Furniture (416. 67)
Rent Expense (4 000)
Bad Debts Expense (2 400)
Taxes and Licenses (580) ( 17 726.67)
Operating Income 22 405.33
Interest Income 30
Interest Expense (90)
Net Income P 22 345.33
 C&Q’S TRADING
STATEMENT OF CHANGES IN EQUITY
For the Month-Ended JANUARY 31, 2019

C. Dela Cruz, Capital P 173 000

Total Capital 173 000
Withdrawal (800)
Net Capital 172 200
Net Income 22 345.33
Ending Capital P 194545.33
 BALUNGAYA’S MULTI-TRADING ENTERPRISES
STATEMENT OF CASH FLOW
For the Year-Ended DECEMBER 31, 2019

Cash Flow from Operating Activities

Cash receipts from sales P 143 340
Cash payments to employees (5 560)
Cash payment to operating expenses (21 780)
Cash payments to acquire rent (8 000)
Cash deposits (58 960)
Cash refund 1 200
Net cash flow from operating activities P 50 240
Cash Flow from Investing Activities
Cash from bank 58 960
Cash outflow to accounts payable (61 558)
Net cash flow from investing activities P (2 598)
Cash Flow from Financing Activities
Proceeds from cash investment of owner P 150 000
Cash proceeds from debtors 5 910
Cash withdrawal of the owner (800)
Net cash flow from financing activities P 155 110

Net increase in cash P 202 752

Cash at the end of the Period P 202 752
 C&Q’S TRADING
STATEMENT OF FINANCIAL POSITION
As of the Month-Ended JANUARY 31, 2019

Current Asset
Cash on Hand P 179 702
Cash in Bank 23 050
Accounts Receivable 24 000
Allowance for Bad Debts (2 400)
Merchandise Inventory 18 000
Advance Rentals 4 000
Total Current Asset P 246 352
Non-Current Asset
Store Furniture P 10 000
Accumulated Depreciation- Store Furniture (416. 67)
Store Equipment 11 880
Accumulated Depreciation- Store Equipment (330)
Total Non-Current Asset P 21 133.33
Total Asset P 267 485.33
Current Liability
Accounts Payable P 24 000
Withholding Taxes Payable 840
SSS Contributions Payable 1 600
Medicare Contributions Payable 500
Total Current Liability P 26 940
Non-Current Liability
Notes Payable P 46 000
Total Non-Current Liability P 46 000
Total Liability P 72 940
Equity
M.L. Padilla, Capital P 194 545.33

Total Liabilities + Equity P 267 485.33

CLOSING ENTRIES
DEBIT CREDIT

Income Summary P 148 176.67

Sales Returns & Allowances P 1 200
Sales Discounts 140
Purchases 128 400
Freight In 620
Wages Expense 10 000
Taxes and Licenses 580
Interest Expense 90
Depreciation Expense- Store Equipment 330
Depreciation Expense- Store Furniture 416.67
Rent Expense 4 000
Bad Debts Expense 2 400

Sales 167 950

Interest Income 30
Purchases Returns Allowances 2 200
Purchases Discounts 342
Income Summary 170 522

Income Summary 18 000

Inventory (beg.) 18 000
“To close beginning inventory”

Inventory 18 000
Income Summary 18 000
“To update inventory at year end”

Income Summary 22 345.33

C. Dela Cruz, Capital 22 345.33
“To close income summary”

C. Dela Cruz, Capital 800

C. Dela Cruz, Drawing 800
“To close withdrawals”
 C&Q’S TRADING
POST-CLOSING TRIAL BALANCE
JANUARY 31, 2019

DEBIT CREDIT
Cash on Hand P 179 702
Cash in Bank 23 050
Accounts Receivable 24 000
Allowance for Bad Debts P 2 400
Merchandise Inventory 18 000
Advance Rentals 4 000
Store Furniture 10 000
Store Equipment 11 880
Accumulated Depreciation- Store Furniture 416. 67
Accumulated Depreciation- Store Equipment 330
Accounts Payable 24 000
Notes Payable 46 000
Withholding Taxes Payable 840
SSS Contributions Payable 1 600
Medicare Contributions Payable 500
C. Dela Cruz, Capital . 194 545.33
P 270 632 P 270 632